Ekniti Nitithanprapas, head of the Thai excise tax department, said that the Thai excise tax department is considering whether to implement a single tax rate on cigarettes or tax them based on weight.
The current tax structure is a two-tier system, with a 25% tax on cigarette packs with a retail price of no more than 72 baht ($2), and a 42% tax on cigarette packs with a retail price above 72 baht. This tax structure is designed to reduce the impact on low-income consumers. An additional flat tax rate of 1.25 baht is also imposed on each cigarette, regardless of retail price.
To avoid higher tax rates, the current system results in manufacturers pricing cigarettes at 72 baht.
If a single tax rate is determined, the tax rate will be between 25% and 42%.
In October 2021, the government had planned to implement a single tax rate of 40%, but tobacco industry authorities and tobacco farmers expressed opposition due to the impact the tax rate may have on both parties.
The Treasury has been tasked with studying the medium- and long-term structure of cigarette taxes to determine a fair and appropriate flat rate.
